Also known as: restraint on alienation · restraints against alienation · restraint against alienation · rule against restraints on alienation
Written by attorneys · grounded in primary & secondary sources — see below
A provision in a deed, will, lease, or contract that attempts to prevent or restrict the transfer of a property interest by rendering a later conveyance void, imposing liability for breach of a no-transfer agreement, or causing termination of the interest conveyed. Courts generally disfavor such provisions because they impede the free circulation of property and its productive use. A direct restraint is invalid when unreasonable, with reasonableness determined by balancing the restraint's utility against its harmful effects on alienability.
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Rachel Ramirez owns a commercial building and leases space to Ryan Roberts under a lease that requires her to obtain his consent before selling her interest. She receives an offer from a buyer and asks Ryan for consent, but he refuses without any commercial justification tied to the property's use or his interests. The sale proceeds because the restraint is valid only if consent is not withheld unreasonably.
Rajesh Rao conveys land subject to a recorded servitude stating that the parcel may never be sold to anyone outside his immediate family. When Rajesh's heir attempts to sell to a third party, the buyer challenges the restriction. The servitude is struck down because the total bar on alienation lacks sufficient utility to outweigh the injury to marketability.
Raymond Ramos leases property to Raphael Rivera with a clause requiring landlord consent for any assignment by the tenant. Raphael finds a financially stable assignee and requests consent, but Raymond refuses for personal reasons unrelated to the assignee's ability to perform. The assignment is permitted because the landlord cannot withhold consent unreasonably under the lease restraint.
Ronald Reed leases warehouse space from Rocky Mountain Mining under a clause requiring consent to assignment. Ronald locates a qualified assignee whose business use matches the lease terms, but the landlord withholds consent citing only a vague preference for the original tenant. The court requires the landlord to show a commercially reasonable objection before the restraint can block the transfer.
Raven Logistics' owner hires an attorney to draft a will leaving shares subject to an absolute bar on any future sale or pledge by the beneficiaries. The drafting attorney includes language creating an invalid restraint that later causes the gift to fail under property rules. The disappointed beneficiaries sue the attorney for negligence in creating an unenforceable restraint.
Riverstone Manufacturing purchases timber rights from the state under a contract that bars resale of the processed timber outside the state. The buyer challenges the restriction as an improper restraint that prevents free alienation of the goods once title passes. The Court holds the state acts as a market participant and may impose the condition without violating commerce principles.
A landlord may withhold consent only for commercially reasonable objections related to the proposed assignee's ability to perform lease obligations or the proposed use of the premises. An absolute right to withhold consent is enforceable only if the lease expressly grants it through free negotiation. Unreasonable withholding allows the assignment to proceed.
Courts weigh the utility of the restraint against the injurious consequences of enforcing it on alienability. A total prohibition on transfer is almost always invalid. Partial or time-limited restraints may survive if they serve a legitimate purpose without unduly depressing market value or narrowing the buyer pool.
…(1980) § 8:15, at pp. 578-579. See also 2 Powell on Real Property, ¶ 246[1], at p. 372.97.) The common law's hostility toward restraints on alienation has caused such restraints on leasehold interests to be strictly construed against the lessor. (See Schoshinski, supra , § 8.16, at pp. 583-588; 2 Powell, supra , ¶ 246[1], at pp. 372.97,…
…phraseology that was invalid by virtue of section 715.2 and former sections 715.1 and 716 of the Civil Code relating to restraints on alienation and the
…as noted by MR. JUSTICE BLACK in Bell v. Maryland , 378 U. S. 226, 329 (dissenting), restrictive covenants "constituted a restraint on alienation
…of that real estate in the trust, that mandate will not survive the trust’s lawful term, and it is, therefore, not an unlawful restraint on alienation
No. A right of first refusal is not treated as a restraint if its price and exercise period are commercially reasonable. When the terms are unreasonable, the provision is analyzed under the rules governing disabling or promissory restraints and may be invalidated.
An absolute bar that makes transfer impossible for any period after the gift takes effect violates the policy favoring free alienation. The rule invalidates the restraint itself while preserving the underlying gift. Courts refuse to balance purpose or duration when the restraint is total and perpetual.